In Detroit, Start-Ups Fill Void Left by Automakers

According to a new report in USA Today, at least a few Detroit start-ups have moved into empty, shut-down auto factories.

These old factories, abandoned by Detroit’s automakers during the recession, have become the new home for a diverse range of start-ups, including (fittingly) two small auto companies working under the umbrella company Automotive Performance Industries (API)--a repurposing that reaffirms Detroit’s reputation as a fast growing hub for new businesses and venture capital.

In June, API bought an empty auto factory, which had been vacated by the specialty vehicle maker, Saleen Performance, back in 2009. API told the outlet it was originally only interested in the plant for its specialized paint system (used to paint luxury cars). “We bought a paint system, and there happened to be a building around it,” Karl Storrie, president of API, told USA Today.

But this “extra” building has since been put to good use. Currently, API’s two anchor companies -- Alternative Automotive Technologies (which specializes in customized vehicles) and Classic Design Concepts (which makes aftermarket parts, such as customized grilles) -- work together in the facility. While each company makes its own products, they often collaborate on larger projects.

"It's hard to start-up in such an isolated area," Dan Ward, long-time Detroit resident and President of Detroit Labs, told Inc. "Those auto factories are actually far from downtown Detroit, where there is more start-up activity."